The global financial crisis would result in decreased spending and slower economic growth in Kuwait, according to NBK, which would result in slower inflation. The bank also said that annual inflation would be around 5-6 per cent.

The Kuwaiti government has also said it would continue to guarantee deposits in banks in the country until the market was stable, after the central bank moved to guarantee deposits to stop a run on Gulf Bank following its losses on currency trades.

NBK said that the falling pace of prices rises would “take the urgency out of tackling inflation at a time the central bank, and most others worldwide, have switched their attention to fighting financial market turmoil and to restoring confidence.”